Finality and the Virtues of Jurisdictional Declarations

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The Supreme Court sheds light on the finality of Army Corps of Engineers’ jurisdictional determinations.

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In United States Army Corps of Engineers v. Hawkes Co., the Supreme Court held that a “jurisdictional determination” issued by the U.S. Army Corps of Engineers was final agency action subject to judicial review under the Administrative Procedure Act (APA). The fact that the Supreme Court’s decision was both unanimous and yet also yielded four separate opinions hints at the interesting and important administrative law issues that lurk in the details.

The parties who filed the initial lawsuit and appealed to the Court were three companies that operate a peat-mining operation in Marshall County, Minnesota. The companies were seeking to expand their existing mining operation to include an adjacent 530-acre tract of land. The tract includes wetlands containing high-value peat that the companies believed would be suitable, as Chief Justice Roberts quipped, “to provide structural support and moisture for smooth, stable greens that leave golfers with no one to blame but themselves for errant putts.”

Under Section 404 of the Clean Water Act, a permit is required before companies can lawfully “discharge . . . dredged or fill material” into waters that are deemed to be “waters of the United States.” In 2012, during the course of evaluating the companies’ application for their mining operation’s expansion, the Army Corps of Engineers issued an “approved jurisdictional determination” stating the property contained “waters of the United States” subject to regulation. This determination confirmed it was necessary for the companies to secure a Section 404 permit.

The companies sought to challenge the jurisdictional determination in court, but a suit is permitted only if the determination constituted “final agency action” under the APA. Affirming the lower court’s decision, the Supreme Court held that the Corps’ jurisdictional determination was indeed final action. Drawing on the standard established by Bennett v. Spear, the Court determined that the approved jurisdictional determination (1) was not tentative, but rather marked the consummation of the agency’s decision-making process; and (2) determined “rights and obligations” and had “legal consequences.”

The Court further determined that the companies did not have an adequate alternative for challenging the jurisdictional determination in court, which is an additional requirement for judicial redress under the APA.

One interesting aspect of the Supreme Court’s decision is its reliance on a 1989 memorandum of agreement allocating responsibility for issuing jurisdictional determinations between the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers, both of which have statutory authority to enforce the Clean Water Act.

Justice Kagan wrote separately to explain that, for her, the Court’s reliance on the 1989 memorandum was essential. The memorandum provides that “case-specific determinations . . . will be binding on the Government and represent the Government’s position in any subsequent federal action or litigation regarding the case.” The Court read the memorandum to create a 5-year safe harbor for an affected party that receives a negative jurisdictional determination. The Court also cited a 2005 regulatory guidance letter corroborating its reading. (A 2008 regulatory guidance letter, though not cited by the Court, is also in accord.)

The Court’s reliance on the 1989 memorandum may have been unnecessary. Justice Ginsburg rejected that reliance yet still concurred in the Court’s judgment of finality. Army Corps of Engineers regulations describe a jurisdictional determination as a “formal determination” that “shall constitute . . . final agency action.” Approved jurisdictional determinations are defined as “clearly designated appealable actions.” They are distinguished from preliminary jurisdictional determinations, which are “written indications that there may be waters of the United States on a parcel.” As this language suggests, preliminary jurisdictional determinations “are advisory in nature and may not be appealed.”

An approved jurisdictional determination appears, in substance, to be a declaratory order, although neither the government nor the courts ever described it as such in this case. A little-known provision of the APA provides that an “agency, with like effect as in the case of other orders, and in its sound discretion, may issue a declaratory order to terminate a controversy or remove uncertainty.”

An approved jurisdictional determination serves the purpose of resolving the often-considerable uncertainty of whether a piece of land contains “waters of the United States.” Like a declaratory order, a jurisdictional determination is reliable precisely because it is more than merely advisory. It binds both the affected party and the agency. However, its binding effect is also limited by the underlying facts. And although the determination provides legal certainty, it does so non-coercively—that is, without imposing any immediate sanctions or requiring any specific action.

The similarity between an approved jurisdictional determination and a declaratory order further supports the Court’s holding, as the Court itself seems to have implicitly acknowledged. Courts have held consistently that, despite their non-coercive character, declaratory orders are final agency actions reviewable in court. In reaching its decision in Hawkes, the Court cited some of those precedents. It offered previous courts’ treatment of certain Interstate Commerce Commission orders—which were declaratory orders—as examples of “the ‘pragmatic’ approach” that courts have “long taken to finality.”

As the U.S. government noted at oral argument, the EPA and the Corps may have authority to issue a new memorandum of agreement, eliminating the binding character of approved jurisdictional determinations. If, as I have suggested above, that character flows independently from the relevant regulations and associated guidance, those materials would also need to be modified.

Assuming agencies have this authority to modify the binding character of jurisdictional determinations, it would be a shame if they were to exercise it in response to Hawkes. Writing separately in concurrence, Justice Kennedy, joined by Justices Thomas and Alito, questioned whether agencies could exercise such authority consistent with due process.

Regardless, abolishing the practice of issuing approved jurisdictional determinations would deprive both agencies and affected parties of substantial benefits. As the Court explained in Rapanos v. United States, the costs to affected parties of completing the Section 404 permit process are substantial. The process presumably also places a large burden on agency resources. The final, binding character of an approved jurisdictional determination offers valuable legal certainty and facilitates the resolution of a foundational question at an early stage of an onerous process. This would appear to be efficient for all concerned: affected parties, agencies, and the courts.

 

This essay is part of RegBlog’s seven-part seriesThe Supreme Court’s 2015 Regulatory Term.

Emily S. Bremer

Emily S. Bremer is an Assistant Professor of Law at the University of Wyoming College of Law. Previously, she was the Research Chief of the Administrative Conference of the United States (ACUS), a federal agency focused on improving government processes, procedures, and performance.